Industry News
Mortgage Industry News
Jobs Exceed Expectations
10/07/2011
Most of the news this week was not good for mortgage rates. The economic data was generally a little stronger than expected, and investor concerns about Europe decreased. As a result, after reaching new lows early in the week, mortgage rates ended the week higher.
Against a consensus forecast of 60K, the economy added 103K jobs in September, and the data for July and August was revised higher by 99K. The Unemployment Rate remained at 9.1%, as expected. Average Hourly Earnings, a proxy for wage growth, increased 0.2% from August. The good news for the economy is that the Employment report surpassed expectations and makes a recession look less likely. Still, stronger job gains are needed to bring down the Unemployment Rate.
In recent weeks, investor sentiment has been gradually shifting toward an increased likelihood for a Greek debt default of some sort. Investors have become less worried about the impact, though, largely due to the safety measures which have been implemented. This week, European officials made available additional aid packages for struggling European nations and banks if needed. The effect on US markets was that investors were more willing to invest in riskier assets, which helped stocks and hurt bonds, including mortgage-backed securities (MBS).
Content Copyright © Ress No. 1, LTD and reproduced with permission.
